Correlation Between Rubicon Organics and ATCO
Can any of the company-specific risk be diversified away by investing in both Rubicon Organics and ATCO at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Rubicon Organics and ATCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubicon Organics and ATCO, you can compare the effects of market volatilities on Rubicon Organics and ATCO and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rubicon Organics with a short position of ATCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubicon Organics and ATCO.
Diversification Opportunities for Rubicon Organics and ATCO
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rubicon and ATCO is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Rubicon Organics and ATCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATCO and Rubicon Organics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rubicon Organics are associated (or correlated) with ATCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATCO has no effect on the direction of Rubicon Organics i.e., Rubicon Organics and ATCO go up and down completely randomly.
Pair Corralation between Rubicon Organics and ATCO
Assuming the 90 days trading horizon Rubicon Organics is expected to generate 2.02 times more return on investment than ATCO. However, Rubicon Organics is 2.02 times more volatile than ATCO. It trades about 0.43 of its potential returns per unit of risk. ATCO is currently generating about -0.03 per unit of risk. If you would invest 32.00 in Rubicon Organics on September 28, 2024 and sell it today you would earn a total of 16.00 from holding Rubicon Organics or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rubicon Organics vs. ATCO
Performance |
| Timeline |
| Rubicon Organics |
| ATCO |
Rubicon Organics and ATCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubicon Organics and ATCO
The main advantage of trading using opposite Rubicon Organics and ATCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubicon Organics position performs unexpectedly, ATCO can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ATCO will offset losses from the drop in ATCO's long position.| Rubicon Organics vs. Decibel Cannabis | Rubicon Organics vs. Cannara Biotech | Rubicon Organics vs. iShares Canadian HYBrid | Rubicon Organics vs. Altagas Cum Red |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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